Rising in opposition to the Government's Bill that would allow corporations and investors to build homes solely to rent them out for profit, Abigail moved a number of amendments and put on the record The Greens view that housing is a fundamental human right.
Ms ABIGAIL BOYD (20:18:31): I speak on behalf of The Greens on the State Revenue Legislation Amendment (COVID-19 Housing Response) Bill 2020. I would love to believe that this bill will create jobs and increase productivity in New South Wales because answers are sorely needed in this crisis. But sadly the Government's response so far has been lacking in imagination regarding the effective long-term management of our economy.
The Greens will be moving amendments to the bill to make it more palatable. I note at the outset that the first home owner concessions and the measures to exempt the aged care workforce retention grants from payroll tax are not problematic from the perspective of Greens members. It is the build-to-rent aspects of the bill that we strongly object to. Long before COVID-19 the financial services sector in Australia was lobbying to establish build-to-rent as an asset class in Australia. Specifically Australian institutional investors have long argued that impediments to foreign investment in the sector need to be removed in order to make the asset class viable. In fact, according to some institutional investors, apparently up to 75 per cent of foreign capital is required in order for this asset class to thrive in Australia.
In the US, build-to-rent has solidified as an investment class in the past 20 years. Institutional investors now hold over 17 per cent of America's apartment rental stock while private companies hold 8 per cent. One‑quarter of US apartment rentals are in the hands of institutions and private corporations whose objective is making a profit. The likes of Mirvac have long argued that Australia needs two essential tax reforms to push the sector forward. One is the surplus tax on foreign investors, which is addressed in schedule 2 and the other is land tax, which is also addressed in the bill. Last year Mr Adam Hirst, general manager of Mirvac's build‑to‑rent department, was reported as saying:
… the real thing for the government at all levels is to make a decision on whether corporate housing, institutional rental housing is an asset class they want. If they get past that and make that decision … the key is really unlocking the capital.
I agree that if we want that asset class then we need to unlock that capital. Mr Hirst posed a threshold question: Is corporate housing and institutional rental housing an asset class that we want in New South Wales? The build‑to‑rent concept focuses on increasing the supply of rental housing through improving investment options and outcomes for institutional investors such as large banks, insurance companies and superannuation funds, where often the beneficial holder is far removed from the day-to-day management of the property. It is not about increasing the housing opportunities for tenants and for individuals in New South Wales. Those investors are investing in this asset class purely for profit, as they are set up to do. Removing tax barriers will increase returns for investors and make that asset class more attractive as a result.
The nature of corporate institutional landlords is that they are seeking to maximise their profits. That will always mean that the experiences and rights of tenants are subservient to the profits of the investors. Experience overseas shows high rates of corporate and institutional landlords evicting tenants en masse and then maximising rent increases across the board. Without very strong safeguards for tenants those schemes will result in higher rents and lower housing security. Given this Government's track record of favouring the profits of large corporations over the rights and needs of individuals in this State, The Greens have no faith in the Government instituting the necessary protections required to make something like this work in the interests of New South Wales or that it will continue to do so in the future.
Having said that, The Greens believe that housing is fundamentally a human right and not an asset class. The increasing commodification of housing in Australia and the concentration of housing in private hands is directly related to high levels of housing stress and ever-increasing levels of wealth inequality in the State. COVID‑19 has shown up the faults in government policy that favours big operations and the markets above all else. It has shown us very clearly that the Government needs to step in to provide essential services. Housing is an essential service. I remind members that this week is Homelessness Week. Now is the time to be rolling out public housing stock, not worsening our long-term economic outlook by condemning future generations to ongoing housing stress and a lack of housing security. Build-to-rent is not an asset class that we want. It is for that reason that we will be opposing the bill in its current form.